Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

As the Dow Jones posts new record highs this month, there is something strange going on with the Dow components where most of them are NOT making new highs !!!

So how many Dow Components are making NEW ALL TIME highs this month ?
FIVE ! That's 5 out of 30 are making new all time highs - WHILST the Index makes NEW highs

How many trading more than 10% below their all time highs ?
TWENTY - Two thirds of the Dow Stocks are trading more than 10% Below their all time highs.

How many are trading more than 20% below their all time highs ?
EIGHTEEN - More than half the Dow 30 Stocks are trading 20% Below their all time highs.

And here's a real shocker ! How many stocks are trading more than 50% ! Below their all time highs !
FIVE DOW STOCKS are trading more than 50% below their all time highs - THATS the same number making new all time highs !

So where am I going with this analysis ? ...... In the run up to the US Election the Dow Jones is Making NEW All time highs, when most of its components are nowhere near making new highs, does this or does this not smell of market manipulation ?

The situation is even worse when you consider the stocks that have been REMOVED from the index ! I.e. Eastman Kodak off 75%, International Paper off 45%. Those that say the markets are not manipulated, then who do you explain these facts ?

Table of ALL Dow 30 Stocks

Name

Last

Change

Percent

YTD Percent

Year High

All time high

% from High

ALCOA INC

26.64

0.04

0.15%

-9.91%

36.96

45

-41%

AMER INTL GROUP INC

67.27

-0.08

-0.12%

-1.41%

71.09

71.09

-5%

AMER EXPRESS INC

58.02

0.13

0.22%

12.75%

58.02

58.02

0%

BOEING CO

82.39

-1.25

-1.49%

17.30%

89.58

89.58

-8%

CITIGROUP INC

50.38

0.2

0.40%

3.81%

51.33

55

-8%

CATERPILLAR INC

69.08

-0.17

-0.25%

19.58%

82.03

82.03

-16%

DU PONT E I DE NEM

45.08

-0.04

-0.09%

6.07%

45.75

85

-47%

WALT DISNEY-DISNEY C

31.11

-0.19

-0.61%

29.79%

31.59

44

-29%

GEN ELECTRIC CO

35.98

-0.24

-0.66%

2.65%

36.48

61

-41%

GEN MOTORS

32.99

0.33

1.01%

69.88%

34

94

-65%

HOME DEPOT INC

36.9

-1

-2.64%

-8.84%

43.95

70

-47%

HONEYWELL INTL INC

42.61

0.3

0.71%

14.39%

44.48

68

-37%

HEWLETT PACKARD CO

38.86

0.44

1.15%

35.73%

39

69

-44%

INTL BUSINESS MACH

86.08

1.38

1.63%

4.72%

89.94

138

-38%

INTEL CP

21.6

0.11

0.51%

-13.46%

27.49

76

-72%

JOHNSON AND JOHNS DC

64.58

-0.26

-0.40%

7.45%

65.88

70

-8%

JP MORGAN CHASE CO

48.16

-0.1

-0.21%

21.34%

48.57

65

-26%

COCA COLA CO THE

44.02

-0.03

-0.07%

9.20%

45.4

88

-50%

MCDONALDS CP

42.11

-0.12

-0.28%

24.88%

42.46

50

-16%

3M COMPANY

75.4

-0.03

-0.04%

-2.71%

88.35

90

-16%

ALTRIA GROUP INC

79.63

0.85

1.08%

6.57%

85

85

-6%

MERCK CO INC

43.2

0.44

1.03%

35.81%

43.54

90

-52%

MICROSOFT CP

28.37

0.15

0.53%

8.49%

28.69

60

-53%

PFIZER INC

27.59

-0.06

-0.22%

18.31%

28.6

50

-45%

PROCTER GAMBLE CO

62.13

-0.28

-0.45%

7.34%

63.74

63.74

-3%

AT& T INC.

33.6

unch

unch%

37.20%

33.76

60

-44%

UNITED TECH

66.5

0.12

0.18%

18.94%

66.89

66.89

-1%

VERIZON COMMUN

37.05

0.06

0.16%

23.01%

38

68

-46%

WAL MART STORES

48.46

0.14

0.29%

3.55%

50.87

70

-31%

EXXON MOBIL CP

68.4

0.75

1.11%

21.77%

71.22

71.22

-4%

So How is the Dow being manipulated higher ?

The Buying of Dow Futures contracts by institutions such as the Fed and politically motivated financial instituions, wanting to manipulate the market, cash values of those stocks that are more susceptible to raising the index are bought via arbitrage programs that look for differences between the cash index and the futures market, thus most components (low priced dow stocks), don't factor into the arbitrage programs buying activity.

Why ?
Thats obvious, in the run up to the US Mid-term Elections in November. There could be a case of something similar with Crude oil, but thats a seperate article ;)

Disclaimer - This Analysis / Forecast / Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.
The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk

Comments

Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

So how high does the Dow have to go to make a new high in realterms?

Nadeem_Walayat
14 Oct 06, 21:39

Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

In real-terms the dow would need to rise above 14,800 to make a new REAL high

30 Oct 06, 03:32

Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !
Yet this economic "resilience" on Wall Street isn't being felt on Main
Street. The vast majority of the American working family is simply being
squeezed by high energy costs, high or no healthcare costs an skyrocketing
college tuition costs. This is NOT the economy we enjoyed in the 1990's -
and it wasn't just the dot.com sector which benefitted.

Latest Gallup poll shows over 2/3 (68%) of Americans think this country is
headed in the wrong direction. Only 30% believe everything is OK. That has
been a long term trend and has actually worsened over the past year.

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